The Art of the Deal
Despite the fact that The Donald did make his fortune in real estate, I'm not referring to Donald Trump's book, The Art of the Deal". Rather, in today's Charleston real estate market, it just seems that everyone is looking for a deal. But is a deal measured by percentage off price or the bottom line price that you pay.
It seems the first thing that a lot of buyers want to know is whether they can buy a home at a discount from the listing price instead of looking at the current price and seeing whether it might already be reasonable. Of course because there are so many choices available to buyers and everyone knows that it's a buyer market, many buyers simply think in terms of discount from list price and if they can buy at a certain discount, they made a good deal.
But let's talk about discount from list price for a minute. On average, homes sold in Charleston over the past year have sold for 6% less than list price. That is an average. Some have sold for more than list, more have sold for less than list and of course I'm sure there are some that have sold for exactly list. So 6% is the overall average discount from list price.
The average discount varies based on price point, homes under $300,000 have sold for an average of 4% less, homes selling between $300,000 and $600,000 have sold for 6% less and luxury homes selling for more than $600,000 in Charleston have sold for almost 10% less on average.
Now if a home has just come on the market, more than likely a large discount from list won't be appreciated or possibly even considered by a seller and the same holds true if the seller just reduced their price a few days before your offer came in. So it's important to note both the list date and the date of recent price reductions when considering making an offer.
But if your analysis of comparable properties happens to show that the property is still significantly overpriced compared to similar homes that have sold, you have some leverage in the negotiation.
So don't start the negotiation off with a certain discount percentage in mind without doing your homework. In my opinion, a good price is far more important than a big discount and the art is all about successfully making a deal happen at a very advantageous price.